COMPLIANCE STRATEGIES AND REGULATORY EFFECTIVENESS OF PERFORMANCE-BASED REGULATION OF CHEMICAL ACCIDENT RISKS

This paper investigates the role that performance-based regulations ca n play in linking a firm's environmental, health, and safety concerns with their corporate strategy. The specific focus is on the performanc e standards required by the Clean Air Act Amendments (CAAA) which requ ire firms that store or use certain chemicals to develop a Risk Manage ment Plan (RMP) for reducing the likelihood and impact of accidents at their plants. Data from a series of case studies and interviews of ex ecutives in chemical firms reveal that proactive companies integrated many of the requirements of the CAAA into their management systems pri or to the regulatory requirements. Most of these firms tend to be larg e ones. Small firms often lack the resources to implement these regula tions and hence have tended to have a more difficult time with complia nce.